How New Tax Laws Could Impact Your Next Return
Stay Informed About Recent Tax Law Changes and How They Affect You
Tax laws are constantly evolving, and staying informed about the latest changes is essential for accurate tax filing. Recent tax law changes could have a significant impact on your next return. Here’s a look at some of the key changes and what they mean for you:
Adjustments to Income Tax Brackets: The IRS adjusts income tax brackets annually to account for inflation. These adjustments could change your tax rate, so it’s important to review the new brackets and determine how they affect your tax liability.
Changes to Standard Deduction Amounts: The standard deduction amount has increased for most taxpayers. For 2024, the standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly. This increase may reduce your taxable income and lower your tax bill.
Updates to Child Tax Credit: The Child Tax Credit has undergone changes in recent years. For 2024, the credit is $2,000 per qualifying child, with up to $1,600 refundable. Be sure to review the eligibility requirements and income limits to see if you qualify.
Modifications to Retirement Account Contribution Limits: Contribution limits for retirement accounts, such as 401(k)s and IRAs, have increased. For 2024, the 401(k) contribution limit is $23,000, and the IRA contribution limit is $7,000. These increases provide an opportunity to save more for retirement while reducing your taxable income.
Impact on Itemized Deductions: Certain itemized deductions may be subject to new limits or phaseouts. For example, the deduction for state and local taxes (SALT) remains capped at $10,000. Review your itemized deductions to determine if you’re still eligible to claim them.
Changes to Health Savings Accounts (HSAs): The contribution limits for HSAs have increased for 2024. The new limit is $3,850 for individual coverage and $7,750 for family coverage. If you have an HSA, consider maximizing your contributions to take advantage of the tax benefits.
Staying informed about new tax laws is essential for accurate tax filing and effective tax planning. By understanding how these changes impact your next return, you can make informed decisions and optimize your tax situation. If you're uncertain about how the new laws affect you, Peggy's Family Tax Service is here to provide expert guidance and ensure you're fully prepared.
